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Aust bond market strong on CPI data

Australian bond futures prices remain strong after lower than expected inflation dampened speculation of a cash rate hike any time soon.

Figures on Wednesday showed the consumer price index rose 0.6 per cent in the March quarter, lower than the 0.8 per cent economists had been expecting, reducing the likelihood of an imminent rate hike, Westpac senior market strategist Damien McColough said.

"The market is still mulling over the fact that after yesterday's CPI, the Reserve Bank of Australia will probably sit on its hands for longer than was expected," Mr McColough said.

"There were people out there calling for tightening to come sooner rather than later.

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"It's also the end of a very short week, there hasn't been a lot of people in the market these last three days so there are very low volumes ahead of Anzac Day."

At 1630 AEST on Thursday, the June 2014 10-year bond futures contract was trading at 96.045 (implying a yield of 3.955 per cent), up from 96.035 (3.965 per cent) on Wednesday.

The June 2014 three-year bond futures contract was at 97.070 (2.930 per cent), up from 97.040 (2.960 per cent).